5. Standard for Review of Settlements

Settlements must comply with Rule 51.1(e), which provides:

The Commission will not approve ... settlements, whether contested or uncontested, unless the ... settlement is reasonable in light of the whole record, consistent with law, and in the public interest.

When, such as here, a settlement is presented as an "all party" settlement, we review it for conformance with the four broad guidelines we adopted in Re San Diego Gas and Electric Company, D.92-12-019, (1992) 46 CPUC 2d 538. The parties' motion argues that the Settlement comports with each of those guidelines. The guidelines provide:

a. a proposed all-party settlement commands the unanimous sponsorship of all active parties to the instant proceeding;

b. the sponsoring parties are fairly reflective of the affected interests;

c. no term of the settlement contravenes statutory provisions or prior Commission decisions; and

d. the settlement conveys to the Commission sufficient information to permit us to discharge our future regulatory obligations with respect to the parties and their interests.

In past proceedings we also have acknowledged the similarity between our review of an all-party settlement for reasonableness and fairness and a court's review of whether a proposed class action settlement is fundamentally fair, adequate and reasonable. (See Re Pacific Gas and Electric Company, D.88-12-083, (1988) 30 CPUC 2d 189 [Diablo Canyon]; see also Re Edison, D.93-03-021 (1993) 48 CPUC 2d 352.) The Settlement includes, as Section D, identification of the ways in which the parties' agreement meets the public interest criteria articulated in Diablo Canyon and followed in subsequent Commission decisions.